Procurement leaders putting sustainability at the forefront of strategy
The past year has shown us more than ever that ignoring sustainable procurement, both in the long and short term, is a mistake. Procurement teams have a unique ability to be a leading voice in driving sustainable corporate practices. With their purchasing power, large corporations are taking on the responsibility to drive sustainability goals throughout the globe.
Addressing sustainability issues cannot be done in a silo and requires collaboration both in and outside of organizations. It’s a challenging, yet inspiring, directive for procurement leaders. In our latest webinar, we spoke with four leaders who have made sustainable procurement a key focus of their organizations. Here are some of our takeaways.
Build a culture that values sustainability
Thomas Udesen leads procurement at Bayer, and is also the Co-founder of the Sustainable Procurement Pledge. Udesen cautions that there is no “quick fix” to sustainability and that organizations should prepare themselves for a journey. To embark on this journey successfully, sustainability must be valued across the organization in such a way that even when you experience setbacks, the commitment to sustainability does not waver. From Udesen’s perspective, building a culture that values sustainability means framing sustainability as an asset to be integrated into everything a company does, which ultimately develops a more resilient organization.
Natalie Harris, who heads up sustainability and sourcing at Eastman Chemical, agrees that sustainability is a lens leaders need to look through when they show up to work every day. In Natalie’s experience, sustainability isn’t just another corporate initiative, but rather a way of doing business. A critical aspect of cultivating the right cultural mindset is actually keeping the momentum going once the initial commitment is made. Eastman Chemical has developed a tactic to help leaders across the organization model the commitment to sustainability. The company hosts “huddles,” or small group discussions, that bring together employees from different parts of the organization, both functionally and geographically. These huddles are designed to seek feedback on how the company is executing on its sustainability goals. The small group approach allows for meaningful and productive dialogue that integrates more voices into the conversation. Additionally, this type of check-in allows for consistent calibration of cultural alignment towards sustainability.
Make the link between sustainability and corporate strategy
Building a culture that values sustainability implies some level of investment to at least begin exploring actions your organization can take to build a more sustainable future. But sometimes that mandate isn’t coming from the C-Suite, or anywhere within the organization. This creates an additional challenge for procurement leaders to gain stakeholder buy-in. For procurement leaders struggling with gaining buy-in, Udesen’s advice is to “educate yourself. Make sure that you are comfortable and competent in articulating why sustainability is really amazing, good business. Build the vocabulary and make sure you have the conversations because it starts with you.”
At EcoVadis, where Sandy Gray is the global leader for the Consumer Goods and Retail sector, the firm’s sustainability assessment methodology purposefully examines how well a company has integrated principles of sustainability into their business and management system. The link between sustainability and corporate strategy is particularly important from Gray’s perspective because of the business continuity component. “Half of the companies in the world have supply chain disruptions and about a quarter of those disruptions are based on sustainability issues, “ says Gray. In her work, Gray has started seeing some common traits among the companies that are most successful with this sustainability-strategy integration. “It’s about that vision and strategy. It is about determining governance. It is about your policies, your procedures, your processes, and the capacity for building continuous improvement.”
To tighten the link between sustainability and strategy, Eastman Chemical has invested in a dedicated data analytics headcount that is embedded directly within the company’s sustainability steering team. Data integrity and visibility can be a challenge as you begin to establish a sustainable procurement strategy, but finding talent with the right balance of analytical ability and business acumen can prove to be an invaluable resource. In the case of Eastman Chemical, Harris says that with “just one hire in six months, we were able to create some pretty great tools that actually allow us to inform both the folks who are on the ground trying to implement some of these things, and leadership, so that we can see trends pretty early.”
Sustainable progress must engage all stakeholders
In the day-to-day work of a procurement leader, it can be easy to think of stakeholders as different leaders across the business for whom you must deliver value. In actuality, stakeholders include customers, suppliers, employees, investors, communities, and others who have a stake in the organization. There is even a whole view of business that stresses the interconnectedness of all of these stakeholders, and argues that companies should create value for all stakeholders, not just investors.
For Cyril Pourrat, Chief Procurement Officer at British Telecom, this is something that he is actively working on. BT makes sure to connect with customers to help them understand the company’s sustainability efforts, and how these efforts actually create value for customers. Beyond customers, Pourrat believes BT can serve as a champion of sustainability in the telecommunications industry overall. Part of this championing involves how BT models effective engagement with suppliers. Pourrat shared that 69% of BT’s carbon emissions come from the company’s supply chain. This discovery has spurred BT to take a closer look at its whole value chain, “going deep into the tiers of the supply chain,” to understand issues related to carbon emissions, labor relations, and more. Pourrat acknowledges that this isn’t an easy feat, but ultimately strengthens BT’s relationships with suppliers, and reinforces the company’s commitment to all stakeholders.
While the four speakers represent different industries and experiences, they all were clear on the fact that true sustainable change comes from collaboration. Climate change and related issues can’t be solved in a vacuum, and require multiple minds coming together. As work continues on this front, these leaders hope to see things like reporting standardization and coalitions dedicated to unlocking industry-wide sustainability solutions.
Watch our webinar to learn how your team can take the lead in building a more sustainable future for all of your organization’s stakeholders.
